As we head into 2026, the Canadian music scene is facing pivotal challenges that could reshape its future.
As the music industry shakes off the holiday lull, critical issues loom large for Canada’s music sector. Billboard Canada has spotlighted several pressing matters that will likely define the industry landscape in the coming year. These topics reflect ongoing debates that have intensified in recent years, particularly influenced by political changes and economic pressures both domestically and internationally.
One of the most contentious issues remains the Online Streaming Act and the so-called ‘streaming tax.’ In 2023, Bill C-11 brought significant updates to the broadcasting laws that hadn’t seen major changes since 1991. As of June 2024, the Canadian Radio-television and Telecommunications Commission (CRTC) mandated that streaming platforms earning at least $25 million annually in Canadian revenues must contribute 5% of those earnings to support Canadian Content. This directive impacts major players like Spotify, Apple Music, and Amazon Music, along with video platforms such as Netflix and Disney Plus.
These foreign companies have since launched legal challenges to contest the act, arguing that their investments already contribute to Canadian content. The Online Streaming Act has become a political flashpoint, pressured by U.S. government interests and entertainment industries pushing for its repeal. It’s rumored that this issue will play a significant role in negotiations under the United States–Mexico–Canada Agreement (USMCA) in 2026, with fears that deregulation could lead to the closure of many Canadian media outlets.
In another alarming trend, the Canadian record label sector is witnessing significant job cuts. In December 2025, Warner Music Canada laid off around 24 employees amid a global restructuring initiative. This downsizing reflects a broader pattern of staff reductions across major labels, with Universal Music Group also confirming layoffs as part of a strategic overhaul aimed at saving substantial costs. Industry insiders speculate that further cuts could be imminent as global consolidation continues.
The advent of artificial intelligence (AI) is adding another layer of complexity to the industry. The rapid rise of this technology is compelling artists and music companies to navigate both its potential benefits and drawbacks swiftly. In October, the major North American performing rights organizations (PROs) announced they would accept registrations for works that incorporate AI-generated elements. This policy shift highlights an emerging trend, as AI’s role in music creation raises important questions about ownership and rights.
In a pointed address to lawmakers, Music Publishers Canada CEO Margaret McGuffin emphasized the urgency of protecting creators’ rights, noting that AI companies have been using Canadian songwriters’ works without due consent or compensation. The conversation around AI’s impact is gaining traction, with stakeholders advocating for stronger protections for artists and their intellectual property.
As these significant issues unfold, the Canadian music industry stands at a crossroads, facing challenges that could shape its future for years to come.